NEW YORK -- Major League Baseball owners have unanimously
approved the three remaining groups bidding to buy the Los Angeles Dodgers from Frank McCourt, setting up a final private auction for
the bankrupt team.
A person familiar with the talks, speaking on condition of
anonymity because no announcement was made, said the vote took
place during a teleconference Tuesday. McCourt and his advisers
will now conduct negotiations and select the winning bidder in the
coming days.
The groups are:
• Former Los Angeles Lakers star Magic Johnson; former Atlanta Braves and Washington Nationals president Stan Kasten; and Mark
Walter, chief executive officer of the financial services firm
Guggenheim Partners.
• Stan Kroenke, whose family properties own the NFL's St. Louis Rams, the NBA's Denver Nuggets, the NHL's Colorado Avalanche and
Major League Soccer's Colorado Rapids, and who is majority
shareholder of Arsenal in the English Premier League.
• Steven Cohen, founder of the hedge fund SAC Capital Advisors
and a new limited partner of the New York Mets; biotechnology
entrepreneur Patrick Soon-Shiong; and agent Arn Tellem of Wasserman
Media Group.
"The obvious front-runner should be Steve Cohen. He's using his
own money rather than someone else's money," said Marc Ganis,
president of the Chicago-based consulting firm Sportscorp, which is
not involved. "He does not have an issue like the cross-ownership
prohibition in the NFL. Cohen has the wherewithal to simply write
the check, especially with Soon as his partner. He's addressed much
of the LA-area concerns by bringing a significant partner in, and
he is extraordinarily capitalized."
McCourt's financial adviser, Blackstone Group, will conduct the
private auction with the finalists supervised by mediator Joseph
Farnan Jr., a former federal judge appointed in October by U.S.
Bankruptcy Judge Kevin Gross in Delaware. The auction is to start
Wednesday in New York.
The person familiar with the call said McCourt tried to
introduce at least one new bidder to the process Monday but was
prevented from doing so by the mediator.
Under an agreement reached by MLB and McCourt in November,
McCourt is to select the winner by Sunday. The sales agreement is
to be submitted to the bankruptcy court by April 6 ahead of a
hearing seven days later and the sale completed by April 30, the
day McCourt is to make a $131 million divorce settlement payment to
former wife, Jamie.
The current bids are all $1.4 billion to $1.6 billion and
include the parking lots surrounding Dodger Stadium, which McCourt
has said are not for sale. The sale price will be a record for a
North American sports team.
If the final agreement differs significantly from the offers
approved Tuesday, MLB has the right to review the deal again.
Kroenke's bid could be complicated by an NFL rule against owning
a team in a different sport.
"If he ultimately has the winning bid," NFL commissioner Roger
Goodell said Monday, "we'd immediately move with our committee,
knowing it's important to baseball."
There was some concern among MLB officials about the financing
of the Walter bid because some of the money was coming from
insurance companies that are owned by Guggenheim. The person
familiar with the call said several team owners voiced that during
the teleconference.
"The problem there is a fundamental problem as you go into an
auction, and that is the absolute reliance on other people's
money," Ganis said. "It means a lot of regulators. It means
either shareholders or, depending on which insurance companies it's
coming from, the insured themselves."
Already eliminated were five bids that initially had been
submitted to MLB for consideration. They included:
• Alan Casden, chief executive officer of the Beverly Hills real
estate company Casden Properties.
• Leo Hindery, managing partner of the private equity firm
InterMedia Partners and former chief executive officer of the YES
Network, and Marc Utay, managing partner of the private equity firm
Clarion Capital Partners.
• Jared Kushner, publisher of The New York Observer and
son-in-law of real estate developer Donald Trump.
• Stanley Gold, chief executive officer of Shamrock Holdings,
the investment company of the family of the late Roy Disney.
• Memphis Grizzlies owner Michael Heisley and Tony Ressler of
the assets firm Ares Management.
McCourt paid $430 million in 2004 to buy the team, Dodger
Stadium and 250 acres of land that include the parking lots, from
the Fox division of Rupert Murdoch's News Corp. The team's debt
stood at $579 million as of January, according to a court filing,
so even after the divorce payment, taxes and legal and banking
fees, he stands to make several hundred million dollars.
The Dodgers filed for bankruptcy protection in late June, just
days before the team was expected to miss payroll. The filing came
after baseball commissioner Bud Selig refused to approve a 17-year
agreement between the Dodgers' and Fox's Prime Ticket subsidiary
that would have been worth $2 billion or more. MLB feared McCourt
would use about half of an intended $385 million cash advance to
fund his divorce.
Los Angeles finished third in the NL West at 82-79, had just
three sellouts and fell short of 3 million in home attendance in a
full season for the first time since 1992.